Differentiating between charge cards and credit cards can be confusing and even though the terms are sometimes used interchangeably, they are very different, each with its own distinct dynamics associated with the financial transactions.
A credit card is a revolving credit account that does not need to be paid in full each month, but instead allows the cardholder to spread his payments out. No late fee is charged provided the minimum payment is made at specified intervals each month. From there, the balance carries forward as a loan charging interest. Charge cards, on the other hand, are typically offered with no spending limits.
Keep in mind, however, a late payment made by the card holder may result in a spending limit being instituted. This varies from account to account and from one credit card network to the next. Credit cards always have a specified line of credit that the user may not exceed for purchases.
A “no pre-set spending limit charge card”, such as what consumers find with many of the American Express offers, are just as their names imply. They do not have a specified spending limit.
In recent months, many have questioned how their credit scores can reflect accuracy in the absence of spending limits. After all, how do the agencies figure the missing numbers that spending limits would traditionally represent? The process is simple: FICO considers the high balance as the limit used in its ratios. That highest balance is what’s reported to the credit bureaus. It still remains a bit unclear as to how long that high balance is used: the life of the account or do the numbers fluctuate when necessary?
American Express is the one name most people associate with charge cards. Unlike debit and traditional credit cards, AMEX products allow users the convenience of no pre-set spending limits. The idea is to ensure the consumer has complete control over his expenses. There are American Express accounts that follow the more classic credit card dynamics, though for the most part, the AMEX family consists of charge cards.
With these thoughts in mind, if you’re considering a charge card, here are a few of the more popular American Express offers. This time, though, instead of our usual reviews, we’re going to do a bit of comparison amongst the AMEX offers so that the reader can get a better idea of how each consumer offer compares to the other.
The AMEX Premier Rewards Gold Card: The annual fee is $175 though the first year is waived.
The Platinum Card from American Express: This offer has a $450 annual fee.
AMEX Gold Card: This consumer charge card has a $125 annual fee and it too is waived the first year.
The AMEX Premier Rewards Gold Card: Members earn 3 times the points on airfare, double points on groceries and fuel costs and one point per dollar spent on everything else. Plus, you’ll enjoy exclusive access to Gold Card destinations and events.
The Platinum Card from American Express: Global travel benefits, Priority Pass and up to $200 in airline fee credits each year for those frustrating fees such as baggage check fees.
AMEX Gold Card: This offer includes Membership Rewards, which earns 10,000 bonus points for purchases up to $500 within the first ninety days of opening your account. Plus, you earn a reward point for $1 spent on any other eligible purchases.
The AMEX Premier Rewards Gold Card: You may add up to five additional cardholders at no cost; after five, additional cards cost $35 each year. Late payment fees are $35, as are returned payment fees.
The Platinum Card from American Express: This offer includes the option of adding up to three additional cards for $175 a year. No late payment fee associated with this offer.
AMEX Gold Card: Additional cardholders can be added for $35 each year. No late payment fees with this offer, either.
Of course, these are just a very few of the many considerations you’ll need to keep in mind as you go about deciding which offer to pursue. These highlights are meant to be just that: the highlights of each offer. The terms and conditions reveal all you need to know.
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